News Excerpt:

The Department of Space in India saw a 0.02% rise in the department's share of outlays compared to the Revised Estimates for the fiscal year 2023-24 in the 2024-25 Budget announced by the Finance Minister.

Focus area in Space technology:

• The majority of the increase is directed towards the development of space technologies, with a marginal rise for space applications. 
• However, funding for space sciences decreased, and the budget for the INSAT satellite systems was nearly halved compared to the previous year.

Boost to Space Startup:

• A venture capital fund of ₹1,000 crore (approximately $120 million) was announced to support Space Startup.
• The initiative aims to expand India's space economy five fold over the next decade.
• As per government report in the Parliament the current size of the Indian Space Economy is estimated around $8.4 billion (around 2-3% of global space economy) with a potential to reach $44 billion by the year 2033.
• The Finance Minister also proposed removing the angel tax as barriers to new investments in the sector.
• Earlier this year, the Indian government allowed 100% automatic foreign direct investment (FDI) in satellite component manufacturing and user ground segments, up to 74% in satellite manufacturing and operations, and up to 49% in rockets and spaceports.
• This move combined with removal of Angel Tax is expected to improve investment in Space Startup by manyfold.
• Many experts have also expressed optimism about the government's role as an anchor customer.
• They have argued that government procurement could validate high-risk products and create a competitive market, encouraging further investment from other sources.

Challenges in Achieving the goals set in the Budget:

• This move has received mixed reactions from industry experts and stakeholders.
• Critics argue that the allocated fund is insufficient to achieve the ambitious goals set by the government.
• As per experts the fund should be 10 to 100 times larger to make a significant impact. 
• The allocation is being described as a "start" with a need for more substantial support from government as an anchor financier and customer is crucial for the industry's growth.
• The total funds raised by Indian space startups in the 2023-24 fiscal year amounted to only $134 million, indicating need for more government investment to achieve the stated goal.
• There is lack of revenue growth among Indian space startups, with none crossing the ₹100 crore mark. 
• There is a need for the industry to demonstrate success beyond raising venture capital to increase the risk appetite of investors.

Overall, while the budget's provisions for the space sector are seen as a positive step, industry experts believe that more substantial support is needed to fully realize India's space ambitions. The coming years will be crucial in determining the impact of these initiatives on the growth of the country's space industry.